Private Company Stock Options: The Renewed Importance of Determining Fair Market Value in Light of Section 409A of The Internal Revenue Code

Section 409A of the Internal Revenue Code substantially changes the landscape for stock option grants. Section 409A imposes adverse tax consequences for optionees holding stock options that have exercise prices below fair market value and that are first exercisable after December 31, 2004. While determining the fair market value of common stock for options has always been a challenge, the stakes in appropriately determining fair market value have never been higher.

Goodwin Procter hosted this one hour webinar that discussed the application of Section 409A to stock options by private companies and provide practical guidance on option grants and determination of fair market value to avoid any adverse consequences to optionees and companies.